From that point on dividends are expected to grow by 3 per


A company just paid a dividend of $1.0. The dividend expected in one year is $3.5; the dividend expected in two years is $4.0; and the dividend expected in three years is $2.5. From that point on dividends are expected to grow by 3% per year indefinitely. The appropriate discount rate for the company is 13%. The stock's fair value is:

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Finance Basics: From that point on dividends are expected to grow by 3 per
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